"Towards Our Future Financial Wellbeing" - Speech by Deputy Governor Colm Kincaid at Financial Services Ireland

Good morning, and thank you to Financial Services Ireland for the invitation to speak to you today.  Today’s Roundtable provides an opportunity to discuss the issues that go to the heart of building a financial system that serves people and the wider economy, and responds effectively to the needs of those who depend on that system. 

The Central Bank of Ireland’s founding legislation states “the constant and predominant aim of the Central Bank shall be the welfare of the people as a whole”. Since taking up the role of Deputy Governor (Consumer & Investor Protection) in August, I have spent time engaging with the public we serve, the firms we regulate and others in public life with this statutory aim in mind. 

These engagements have given me the opportunity to hear how the landscape facing consumers and investors is evolving, the role being performed by the firms we regulate and how the Central Bank might work better to achieve our statutory aim. This has included sitting with people in community groups, charities, sports clubs, budgeting advisors, consumer advocates, healthcare workers, representatives of rural areas as well as industry leaders and regulatory colleagues in other jurisdictions facing challenges similar to those we face in Ireland today.

A common theme emerging from these conversations is that the risks to the welfare of the people as a whole are changing.  I will come back to this a little later in my remarks.  But first I will spend some time discussing recent changes the Central Bank has made to better support consumers and investors, and some priority themes for our work in the immediate period ahead.

Our new supervisory approach

Earlier this year we introduced our more integrated approach to how we supervise financial services.¹ Our new approach does not change the safeguarding outcomes we are pursuing – protection of consumer and investor interests, the integrity of the financial system, the safety and soundness of firms, and financial stability – and we remain a risk-based, outcomes focused regulator.  However, in moving to this new approach we have recognised that changes in the financial system require more joined up holistic responses with multi-disciplinary teams working together to deliver our supervisory priorities in a more effective way.

This is an important development in how we are transforming the Central Bank of Ireland to deliver better outcomes for the public we serve. So I would like to start my remarks by explaining  how our new supervisory approach aims to achieve better outcomes for consumers and investors. There are three points to make:

1. Our new supervisory approach does not change the protections for consumers and investors or the high standards we expect of the firms we regulate to secure their customers’ best interests.

   Rather, with our new supervisory model, we are recognising that to achieve these outcomes in the face of a changed risk landscape, we need to work differently. In particular, we are recognising that the big challenges faced by consumers and investors increasingly transcend traditional regulatory concepts such as ‘prudential’ or ‘conduct’. Take the implications of digitalisation as just one example.

   Today’s challenges also require that the Central Bank tap into the full breadth of its resources and tools in the face of more interconnected issues, including how we continue to use our statutory powers of enforcement most effectively. In doing so, with our new Consumer Protection Code and Supervisory Model combined, we are raising the bar in terms of the protections consumers and investors should receive. Consistent with our simplification goals, we are also recognising that better, clearer rules and regulatory processes enhance consumer and investor outcomes.

2. Our ‘new approach’ is not entirely new. We have done integrated supervision before and seen it be successful where traditional, less integrated approaches would have failed to deliver good outcomes.

   Cases in point include our work on foot of the Global Financial Crisis to improve lending standards and how borrowers are treated in arrears, migrating our financial system through Brexit, keeping it functioning through COVID-19, making sure firms put the right supports in place for consumers facing rising costs of living, and safely migrating customers of Ulster Bank and KBC to new service providers (including requiring redress in cases where firms got it wrong).

   By formalising these approaches into a new framework, we aim to make working in this more integrated way our default, rather than something we step up to for specific projects or in times of crisis.

3. We recognise we still have work to do to improve how we achieve our safeguarding outcomes. 

This includes implementing enhancements on foot of the OECD Review of the Central Bank of Ireland’ Supervisory Functions 2024² to improve how we measure and demonstrate our effectiveness, use data, engage with consumers and protect the vulnerable.³ We will also continue to enhance how we use our Consumer Advisory Group and our engagements with stakeholders to inform and improve our work. 

Some specific consumer and investor priority themes for the Central Bank

Consumer Protection is at the heart of everything the Central Bank does.⁴ Our new approach to supervision builds on that fact and aims to maximise the mutually reinforcing aspect of the components of our statutory mandate (from price stability to the safety and soundness of firms to the quality of financial services consumers and investors receive). So, I am loath to single out specific pieces of work under the banner of ‘consumer and investor protection’. That said, I thought it would be useful to call out three high level themes for the Central Bank’s work in the period ahead, with the protection of consumers and investors specifically in mind: 

• How firms operate and the consumer/investor experience: We will aim to ensure firms are well run, secure their customers’ interests and effectively manage any conflicts of interest by placing consumers and investors at the heart of decision making. We will complete our review of the handling of customer complaints to ensure firms raise their standards in this area ahead of the new requirements of our Code coming into force. This includes that firms carry out better root cause analysis of the complaints they receive. I continue to hear that consumers and investors do not always receive the quality of service they paid for and deserve (and people working in financial services to whom I spoke acknowledged this). I continue to believe there is much firms can do to improve their basic level of customer service.⁵ We will support the Government’s Action Plan on Insurance Reform and work to enhance how investors access capital markets to provide for their future. We will enhance how we use our conduct of business returns and other data to better target and plan our supervisory engagements.

   

• Digitalisation: We will focus on how digital innovation can support consumers and investors, including through our Innovation Hub, Sandbox and implementation of our Consumer Protection Code’s requirements for digital financial services. We will progress implementation of the Access to Cash legislation as well as the design of a Digital Euro, so that consumers continue to have choice now and in the future. We will maintain our focus on enhancing operational resilience, recognising the significant impact service disruption has on consumers.   

• Financial crime: Safeguarding the integrity of the financial system and consumer interests by combatting financial crime needs to be a priority for all firms and agencies involved with financial services. Our work will include raising consumer and investors’ awareness of how to protect themselves against frauds and scams, using our status as Trusted Flagger to require criminal content to be taken down by online platforms, as well as detecting and punishing unauthorised providers and market abuse. We will assess fraud detection and prevention controls within mobile apps and other payments services.  We will also work with other law enforcement and government agencies to improve our national framework in the face of the rising threat financial crime poses to our society.

Continuing to build for the future

I want now to come back to the point I made at the outset about the changing nature of the risks to our statutory aim i.e. ‘the welfare of the people as a whole’.

Every conversation I have had since taking up my new role has re-affirmed for me that, increasingly, the challenges we face require more collaborative solutions. In short, we face problems we will either solve together as a society or not at all (fraud, digital safety, climate change, increased complexity in how financial services are provided and used, geopolitical uncertainty … the list goes on). So we need to get better at working together to find solutions to our shared problems. This includes reaching out to others across the wider system and crossing boundaries between financial services and other sectors to find new solutions to new problems.

I suggest there are four essential components to making progress in the face of these challenges:

1. All of us involved in financial services must support a better social conversation on financial well-being.

   The past decade has seen a growing focus on the concept of well-being. This has included a global movement and collection of initiatives that seek to go beyond Gross Domestic Product (GDP) as a sole measure of economic progress by developing more comprehensive metrics to assess national well-being, inclusivity, and environmental sustainability.⁶ In June of this year, the Government published its ‘Understanding Life in Ireland: The Well-being Framework 2025’. It outlines Ireland’s performance on thirty-five indicators, across eleven dimensions, in the Government’s Well-being Framework. This seeks to move beyond using just economic measures in gauging our progress as a country.  At an international level, the concept of ‘financial well-being’ specifically has been included as a key cross cutting theme in the recently revised G20/OECD High Level Principles on Financial Consumer Protection. Work is now underway at OECD level to develop a conceptual financial well-being framework. The Central Bank of Ireland has supported these developments – both nationally and internationally.  This includes our work at the G20/OECD Working Party on Financial Consumer Protection, Education and Inclusion (which looks specifically at these Principles) and the other EU and international fora where we are active.

   Other agencies are also playing their part of course. Not least amongst these is the Competition and Consumer Protection Commission, the Financial Services and Pensions Ombudsman, the Data Protection Commissioner, Commisiún na Mean, An Garda Síochána, the Money Advice and Budgeting Service, healthcare agencies and providers and countless community groups, charities and organisations across our country. They all make a contribution to financial well-being.

   But in the end of the day it is you in industry who provide the services consumers and investors need. It is you who can play the most direct role in practical terms to help the individual consumer or investor to support their own financial well-being. And I do recognise there are industry initiatives already underway that contribute on this front. But I urge you to get more active in this social conversation about how the emerging concept of ‘financial well-being’ can shape the future of financial services and our economic progress more generally.

2. The rules should support a shared vision of financial well-being. Here, I am confident that we have a mature rulebook (at both national and EU level) and that the reforms of our new Consumer Protection Code make it fit for purpose for the period ahead. However, this will only hold true if regulated entities implement these reforms. It will be a priority for the Central Bank to see that they do. This includes taking a consumer-centric view of regulatory responsibilities (and not just those in the Code) as well as initiatives such as simplification. We will also consult shortly on the extension of the Code to credit unions’ core activities. And again, the legislation the Central Bank oversees sits of course within a wider framework of law and law enforcement which must be joined up to deliver the right outcomes.

    

   When we talk about rules these days one’s mind turns quickly to the vibrant discussion about how to simplify the EU and Irish regulatory regime. It is an important topic on which my colleague Deputy Governor McMunn recently outlined the Central Bank’s perspectives.⁷ I would only add, in the context of our discussion today, an invitation to you – as the CEOs of regulated entities – to also bring the simplification mindset to the processes you implement for your customers, including where you are implementing regulatory requirements. Too often have we seen regulatory requirements cited as the reason why a customer experience is not satisfactory only to find that the improvements consumers are seeking can in fact be made. Or we see where a customer centric approach results in meaningful disclosure to consumers, while a less thoughtful application of the very same rules simply furnishes the consumer with reams of unhelpful material. As well as continuing to consider the rules themselves, I believe there is a lot more we can do to simplify financial services for consumers and investors, and reduce costs, by taking a more thoughtful and customer-centric approach to how the rules are implemented and experienced by consumers and investors.

3. Our approach to supervision must keep pace with the risk landscape we face. The good news here is that we have international standards against which we can measure ourselves: the G20/OECD High Level Principles on Financial Consumer Protection. In December 2024, the Central Bank of Ireland became the first authority in the world to have its approach to supervision assessed against these Principles by the OECD. The OECD found the Central Bank to be mature, sophisticated and strongly committed to upholding these international standards. The OECD also made recommendations to further strengthen our supervisory approach. We are implementing these Recommendations through our new integrated supervisory model.

    

4. We need to recognise that, as consumers and investors, we have a responsibility look after our own financial well-being. But we need to be supported to do so. There are a number of reforms in the new Consumer Protection Code that touch on this component. For example, we have modernised our concept of ‘vulnerability’ to better recognise the different types of vulnerability a consumer can now face. Evolving our shared understanding of the new requirements in the Code will be a priority in the year ahead.

But perhaps the most pressing item I see under this heading is supporting the National Financial Literacy Strategy. As consumers and investors we need to have a better understanding of the benefits of financial services and how to navigate the risks.  This is of course a particular focus in the context of the EU’s Savings and Investment Union which is seeking to increase retail participation in capital markets.  There are other examples too where work is needed to support consumers and investors to get the full benefit of the financial services that are available to them.

With these components in place, I believe we can aspire to greater financial well-being and, with that, more resilience to the shocks that will surely come.

Concluding remarks

Ireland is seen as a country with high standards of consumer and investor protection, and the Central Bank of Ireland is seen internationally as a mature and sophisticated consumer protection authority. Our new Consumer Protection Code and integrated Supervisory Model build on these strong foundations. So we can have confidence in our approach for the future.  

But we should also be humble enough to recognise that, in part, our jurisdiction’s strength in consumer and investor protection is a product of the scale of the challenges and misconduct we have had to confront (not least from the Global Financial Crisis, the fallout from which has taken many forms). We should also be honest that while cultural change for the better is underway in many quarters, it has a distance to travel before we can be assured that the lessons of the past have indeed been learned.

Finally, we should acknowledge that the supervision of regulated firms by the Central Bank of Ireland will not solve all the problems facing users of financial services in the period ahead. Increasingly, the solutions will require coordinated action by a range of public bodies (including the Central Bank), the financial services industry and other (non-financial services) industry sectors. In this context, we will need to find new ways of working together to ensure our financial well-being.

Let’s start the conversation.